(EnergyAsia, August 13 2012, Monday) — L & L Energy Inc, a Seattle, US-based company producing coal in China, said it is expanding its operations in southwestern Guizhou province through a strategic  agreement with a local coal supplier to build on an earlier purchase of a large stake in a coal miner.

L&L Energy said said it has signed an agreement with GuangShunYuan Group Mining Co (GSY) to expand its wholesale and logistics operations in China.

Privately owned GSY operates 26 mines with a total annual production capacity of 7.5 million tons, a wholesale network that handlies and distributes 1.6 million tons of coal annually and a chain of stores selling machinery and equipment for the industry.

L&L said the agreement will allow it to access GSY’s vast mining resources in exchange for additional coal supplies as well as “leverage” of the US firm’s business relationship with Datang International, one of the largest utility companies in China.

L & L said it will work with GSY to develop a new coal washing, blending, and wholesale facility on 33 acres of GSY land located near the ZhaZuo railway station, a key rail access point in Guizhou.

GSY also operates a loading facility, located next to L & L’s ShinPingBa loading station, that will boost the US firm’s capabilities to serve additional large orders.

Dickson Lee, L & L’s chairman and  CEO, said:

“We are delighted to reach this strategic partnership with GSY. By leveraging on GSY’s vast mining assets, we have demonstrated our innovative ability to expand business effectively with less capital investment. We plan to develop a joint venture with GSY to accelerate our revenue and profit growth.”

In June, L&L bought a 51% controlling stake in the Lashu mine in Guizhou’s Hezhang county, which is due to start producing this quarter. The mine’s 300,000-ton/year rate will eventually be expanded to 450,000 tons.